1. Field of Invention
The present invention relates to network marketing systems and, more specifically, to an innovative method of conducting a timeshare business.
2. Prior Art
Our planet Earth is beautiful! That is why there will not be a person that would not dream to travel the world and discover its beauty.
The development of modern science and technology allows the modern human to cover huge distances of travel in a very short period of time. This is the main reason of the prosperity of the travel and vacation industry.
The travel and vacation industry offers their customers a wide variety of destinations and services to make their vacations unforgettable. Millions of people take advantage of these services. However, many more millions of people are still deprived of this opportunity.
There is an old saying: “A person must build a house, give birth to a child and travel the world.” Unfortunately the state of the economy in the United States and around the world is such that even a family with an average income who purchased a home, which needs to be maintained and paid for, and has a child or even two or three that need to be supported, this family certainly can not afford not only to travel around the world, but also to pay for a week of vacation, in order for their kids to swim with dolphins, feed exotic fish and to basically have fun. The maximum this family can allow themselves is to get in their car, or take public transportation, and go to the nearest park in order to get away for a weekend.
Today the price of travel and vacation is not affordable to many people. The main cause of the problem is a huge marketing overhead, which increases the retail price of travel and vacation dramatically and makes it unaffordable for millions of people. In other words, the travel and vacation companies are deprived from the huge market of potential consumers of their product.
The first successful attempt to solve the above mentioned problem (marketing overhead) in the hospitality business goes by its roots back to the middle of the 1960's, when in Europe at one of the Alp resorts, the customers were offered future vacations at a price which was considerably less than the regular price. The bet was on the price affordability (no marketing overhead), “word-of-mouth” marketing (free and the most productive marketing in the world) and long-term relationship with customers (guaranteed business in years ahead).
The owner of the resort made a daring decision that laid the groundwork for what has evolved into a multi-billion timeshare industry.
Today over 6.5 million families own their vacations at resorts in more than 90 countries with annual sales reaching over 9 billion.
The quality of timeshare product has improved continually over the years offering consumers condominium-style vacation accommodations in some of the most appealing destinations around the globe.
Timesharing gives consumers flexibility. A variety of flexible-use options is available to vacation owners, including the ability to exchange their accommodations at comparable resorts around the world.
Some of the most prominent names in hospitality have made highly visible moves into timesharing, validating and enhancing the credibility of the concepts. These companies recognized the potential of timesharing as an extension of their existing product line, and have made substantial commitments furthering the industry's global development.
As the demand for timeshare product has grown, so, too, has consumer's desire for flexibility. Options have evolved from the traditional fixed week, fixed unit product to include split week, floating week, vacation clubs, point-based programs, and other alternative uses.
Vacation clubs give buyers access to multiple resorts within a developer's resort group, as well as other ancillary club benefits. Point-based programs frequently offered through a club structure, allow consumers to purchase a specific number of points that can be used in several ways. Points give the consumer the ability to access different unit types and amenities, or even other travel services. Often, consumers can purchase additional points or carry forward unused points toward future vacation experiences, such as vacation exchange.
Vacation exchange is the single most valuable enhancement to the timeshare purchase. It gives timeshare owners the opportunity to trade accommodations at their home resort for comparable accommodations at other resorts around the world.
In transacting an exchange, timeshare owners place their accommodations into the exchange system, making them available to other members who want to vacation at another timeshare resort, or at a different time of the year.
Vacation exchange provides resort developers with a powerful sales tool that delivers the added value of increased flexibility—a proven motivation to the purchase of timeshare vacations.
As a result more and more brand names in the hospitality industry, as well as respected independent developers, are realizing and have become involved in the timeshare business, which has become a global phenomenon.
Since the late 1960's, timesharing has been expanding across the globe. In the beginning of the 1980's, there were about 500 resort projects. Today there are more than 5,700, with the number of timeshare owners increasing to approximately over 6.5 million. Resorts are located in more than 90 countries. The United States has the highest concentration, with more than 1,700 resorts representing about 46 percent of the world market. Europe represents the second largest timeshare market with more than 1,300 resorts, followed by Mexico, the Caribbean, Asia, Australia, New Zealand, and South America.
Today, timesharing is a global success and the fastest-growing segment of the U.S. hospitality industry, with annual sales reaching billions.
Annual sales could reach even much higher numbers if there were none of the problem that the industry faces today, and this problem is returning to a huge overhead related to traditional marketing.
Research indicates that in the United States alone more than 13 million people are interested in purchasing some form of vacation ownership in the next two years. But current industry estimates place market penetration at approximately 3-5 percent of the 13 million potential purchasers, those who are able to afford tens of thousands of dollars of the price of vacation ownership, in which is up to 70% related to coverage of marketing overheads.
Compared to the 1960's and 1970's, when demand for timeshare was high and just under 100 resorts around the world were involved in timeshare programs (so, there was little, if any, competition between them, and, as a result, there was almost no marketing overheads, which made the price of timeshare affordable for average purchasers), today, because the number of timeshare resorts reached the thousands, the competition between them reached its highest point, as well as marketing overhead, which, relatively, made prices of vacation ownership not affordable to many. And those, who can not afford it, did not even qualified for attending sales presentations.
With information, provided by industry trade organization's report, resort developers have fine tuned the process of identifying the people who are most likely to purchase timeshare. It's easy to form a picture of the typical timeshare owner.
In accordance with this report the average timeshare buyers are: middle-aged, well educated and are nearly five times more likely to have graduated from college or to hold a post-graduate degree than the general United States adult population; 87 percent attended college, plus 23 percent hold a master's or doctoral degree, and 44 percent work in professional or managerial positions, while 11 percent are self-employed. This high level of educational attainment and entrepreneurship is a discriminant characteristic that correlates with household income.
The average timeshare owners have a median income of $92,000, while the average household income is over $110,400, compared with just 12 percent of the general U.S. population. About 95% of timeshare owners own their primary residence, reporting on average home value of $263,000.
Huge marketing overhead (which is up to 70% of retail price of timeshare) making price of vacation ownership affordable just by 3%-5% of many of those who want to purchase it.
In other words, timeshare industry is deprived of 95% to 97% in excess of potential business.
The experts estimate that: the average American household owed about $10,000 in credit card debt (at a rate of up to 23%) and credit card debt more than doubled from 1993 to 2003; the source of about 35% of credit card company's profit is late payment fees; more than 1.2 million people filed for bankruptcy in the U.S. in 2003, and the number is increasing every year despite a booming economy; household borrowing stands at a record $6.8 trillion—almost a 50% jump in the past five years; according to a USA Today survey, 54% of American's say it would take three months or less to fall behind in bill payment if they lost their job today.
Due to the above mentioned reasons, about 27% of timeshare owners would like to sell their timeshare ownerships.
However, the timeshare companies refuse to buy their product back.
The existing timeshare auctions are full of offers and absence of demand.
The reason for absence of demand for timeshare is that according to government statistics 67% of average Americans prefers to invest money in real estate, such as primary and/or second home, using second home as an investment property (business property) in order to create wealth-income, equity and appreciation.
In timesharing real estate (business property) as well, as outcoming benefits, belong to developers.
Current business model, which exclude business (vacation) property's ownership opportunity and current business strategy, which include huge overheads related to the traditional marketing—deprives timeshare organizations of access to tens of millions of potential consumers of their product.
In effort to escape huge overheads related to the traditional marketing, many business organization in U.S. and around the world are using network marketing systems. However, up to present day, network marketing is not adopted by travel and vacation industry.
In the late 1940's, a small vitamin company realized that most of their new business was coming from referrals. The owners scrapped the company's traditional marketing plan and replaced it with a radical new marketing program based exclusively on referral fees.
Over the next, almost six decades, network-marketing system exploded. Today there are literally millions of people worldwide partnering with network marketing companies.
Firms that sell products and services using network marketing (network marketing company(ies)) typically recruit independent sales representatives. The independent sales representative then may (but are not required to) recruit others, who then may (but are not required to) recruit still others.
Network marketing is a powerful tool that makes use of the personal contacts that almost any potential independent sales representative has simply by virtue of his/her normal social circles. The larger a person's social circle and the harder the representative is willing to work, the greater his/her potential to build a successful network for the firm.
Network marketing systems are also efficient in that they operate with very little overhead. Each sales representative is an independent operator in contractual relationship with the firm. Sales representatives build networks from circles of existing acquaintances as well as through the Internet, and this, although time intensive, saves the network marketing company the substantial expense of identifying potential consumers of company's product from among populations of strangers.
In an effort to get access to a valuable source of financing of business development projects, network marketing companies often offer to its network the opportunity to open company's retail outlet under a franchise arrangement and to be the owner of the business.
But in most cases independent sales representatives refuse this privilege and option based on:                a) not that many independent sales representatives possess sales and management skills necessary for business success,        b) not that many independent sales representatives possess tens and/or hundreds of thousands of dollars necessary for business development, and        c) those who possess the necessary amount, prefer to invest in real estate or in business, which is producing socially demanded products, instead of investing in a risky traditional point of sale.        
As a result, firms are deprived from access to the valuable source of business development financing.
3 Objects and Advantages
Accordingly, besides the objects and advantages of timesharing and network marketing in my above patent, several objects and advantages are:                a) to provide a method, which allows network marketing organization's network to buy organization's business property, which is producing its product(s) and managed/operated by given organization;        b) to provide a method, which allows network marketing organizations to get a priceless access to the valuable source of business development financing;        c) to provide a method, which allows timeshare organizations to escape the huge overheads related to the traditional marketing;        d) to provide a method, by which timeshare organization offering ownership of vacation property;        e) to provide a method which will give to the timeshare organization a priceless access to a huge market of potential consumers of their products;        
Other objects and advantages are:                f) to provide a method which allows any person, regardless of their household income, to be qualified for timeshare opportunity;        g) to provide a method by which travel/vacation migration around the world will be increased dramatically;        h) to provide a method, by which a process of jobs creation and local economies will get a huge positive impact.        
Further objects and advantages of my invention will become apparent from a consideration of the ensuing description and drawings.